Steel as a raw material is a mainstay in many industries today, and if global reports are anything to go by, the demand for steel will continue to soar. As a steel merchant, therefore, you want to be among firms that analyse the markets in search for industries that will demand more steel in coming days. It is essential to be selective especially after recent reports indicated that iron ore – a critical raw material in steel production – is set to fall by 20% in 2018. As such, steel merchants must choose markets that they need to focus on to remain competitive. This article discusses a few of these markets.
Non Residential Building -- The construction industry in Australia accounts for roughly 8% of the country's GDP, which is third only to mining and finance. According to market reports, non-residential activity will play a significant role in the growth of the construction industry in most Australian states. Notably, it is projected that non-residential building activity will grow from $36 billion in 2016-17 to $39 billion in 2019-20. Therefore, steel merchants that want to remain relevant and competitive in the steel supply business must focus their supply efforts to the non-residential building sector if the projections given are anything to go by.
Infrastructure Market -- One of the far-reaching policies put into place by the Australian government to ensure the growth of the steel industry in the country is prohibiting low-quality steel into the Australian market. To implement the policy, lawmakers have called on the government to put more investment in the country's infrastructure – road, railway, bridges, sewerage, and pipelines. With Australia's population projected to hit the 30 million mark by 2031, it is clear to see why infrastructural growth is critical. As such, one of the government's objectives is to give priority to Australian grade steel over cheap imported steel. Steel merchants should take advantage of the opportunity presented as the government looks to invest more in the infrastructure market.
Specialised Steel Products Market -- With competition being stiff in the steel production industry, the dedicated products market is a route that a steel merchant can take. Specialised steel varieties like those required in the production of drill bits, blades, and livestock handling equipment have a ready market. Most steel merchants tend to avoid the market because producers of the specialised products make small quantity orders on a just-in-time production basis. Nonetheless, aggressive steel merchants can go around the issue by creating a base of many such customers.